Since you never tire of misrepresenting what I say, I never tire of correcting you. Perhaps when you realize that, you'll stop.
I don't have any blind faith in HD DVD--I do have years of experience in CE that tells me Blu-Ray is doomed to niche status, but I never said HD DVD will triumph, just that it's the only one of the two that could be successful for a whole host of reasons previously enumerated.
And I never likened the Blu-Ray/HD DVD format war to the Beta/VHS format war. VHS won because it provided the features consumers wanted (longer recording time with acceptable picture quality). There is little difference to consumers between Blu-Ray and HD DVD other than HD DVD is less expensive and has certain exclusive movies while Blu-Ray has different exclusive movies, so no, I don't see the Beta/VHS analogy.
It's not that consumers don't care about picture quality, rather they balance picture quality with other priorities. They put different values on different things.
The longer recording time issue was straightforward. RCA told SONY "If it can't record a whole football game on one tape, we're not interested". Simple. RCA knew lots of Americans would choose a video recorder that could time shift a whole football game over one that didn't.
The silly thing was, nobody was forcing anyone to use EP mode, it was simply an option they could choose when needed. SONY refused to offer that option to RCA because, in SONY's estimation, the picture quality would not be acceptable. This is yet another example of SONY's arrogance toward consumers, not offering a feature consumers desire because in SONY's estimation it's not good enough--basically imposing their values on consumers and ultimately paying the price for their arrogance.